Insurance mainly depends on the performance of trade and economy. World over, times have not been good. As the sector is tied with trade and economy, in India, growth will continue.
Technology will rule
Technology in insurance will continue to develop. Upgradation of applications in existing areas will be a continuous affair. On top of this, new technologies would be developed in areas of operations which still follow traditional methods. Insurance products linked to specific technologies could also enter the scenario.
The launch of the integrated digital platform, Bima Sugam, may happen this year. Having missed two deadlines, it is now proposed for launch in June 2024. The Chairman IRDAI has often referred to this platform as the UPI moment for the insurance industry.
Policy changes around the corner
Next year may witness two distinct policy phases. The first half of the year would witness slow movements. The second phase which would be after the parliamentary elections in May 2024, could witness major changes. Issue of composite licenses (erasing thereby the distinction between life and non life insurers), permission for insurance companies to distribute other financial products, reduction in capital from the current Rs 100 crore, allowing 100 per cent equity to foreign entities etc, are some of the proposals which have been readied earlier but did not see the light of the day. These and perhaps some more could be cleared.
Entry of new players
Natural calamitie’s frequency are increasing. While economic losses are big, insurance losses are only a small portion of it. Low penetration of insurance is the cause. Providentially, loss of lives has been low during these events and therefore the life insurance sector has not been impacted much. Property damage of individuals is high but much of it is uninsured and therefore does not affect the general insurance companies significantly. Corporates are well insured and would constitute bulk of the insured losses. Individual property like motor vehicles, are better insured and get respite from the loss.
After a gap of 12 years in the life and five years in the general sectors, the industry has seen entry of a few new players. Reportedly, about 19 new applications are in various stages of registration. Some of them could enter the market in the forthcoming year. But chances of their entry having any effect on the market in the near term is minimal.
Regulation of healthcare prices
Hopefully, more attention would be given to customer satisfaction. Servicing of claims, especially in the health sector requires a deep look. Customers find themselves sandwiched between huge amounts charged by hospitals and the disallowances by insurance companies. The industry is harping on the need for a regulator for hospitals and is also working on creating common packages for specified treatments.On the whole, the year is likely to be a continuation of the earlier years, in terms of performance, but could also turn out to be a year where there could be significant policy level changes, which would have its impact in future.
